Britain's top share index sealed its 10th straight close above 6,000 points on Tuesday, with record oil and metals prices supporting the natural resources sector, but some analysts warned that the rise in commodity prices could turn into a negative factor for the equity markets.
The FTSE 100 has raced to five-year highs this year, boosted by rampant bid activity, solid earnings and surging commodity prices, which boost heavily weighted oil and mining shares and disproportionately influence the UK index.
But some strategists argued that the FTSE, now struggling to make further significant headway, may have got ahead of itself.
"It is remarkable how resilient the markets are proving in the face of very, very strong commodity prices," said Roger Cursley, a strategist at Investec. "(But) the bond markets are starting to sense a bit of inflation."
"I do think we are well overdue a setback. You could very easily see 5 to 10 percent off between now and the end of the summer."
The FTSE 100 closed 14.7 points higher at 6,044.1 points. The index has touched 6,092.5 this year but has been range bound between 5,900 and that high for more than a month.
Oil and gas companies such as BP and BG Group contributed most to the session's upward momentum, with the sector adding almost 19 points after oil prices hit an all-time high.
World fuel prices have been rising as Iran, the fourth-biggest crude exporter, resists world pressure to halt its nuclear programme.
Mining stocks dominated the leaderboard, with Antofagasta up 4.1 percent and Xstrata 3.6 percent higher, as gold hit a 25-year high and copper prices breached a record peak.
While those rising commodity prices boost the profits of natural resource companies, there are concerns that other companies are struggling to pass on higher costs to customers.
At some point, analysts argue, the double-edged sword of higher materials and fuel costs will start to fade as a support for the FTSE and begin to cut into investors' appetite for British, and global, equities.
"An awful lot depends on where companies are in terms of renegotiating their wholesale energy prices but if it (oil) does stay up here for any length of time, we will see pain across the board," said Investec's Cursley.
"It is not just steelmakers and the like who suffer from this. It hurts anybody who is using power. It is just another cost pressure at a time when it is very difficult to pass it on."
One sign of margin pressure materialised when shares in mid-cap office products and packaging firm DS Smith slumped more than 14 percent after it said high energy costs would knock its profit below earlier expectations.
The world's biggest online gaming company, PartyGaming, fell 1.8 percent, reversing from an early rise to a 7-month high of 158 pence following performance figures.
The company said it had signed up a record number of poker players in the first quarter, but fears of over-exposure in the United States, where some politicians want to ban online gambling, weighed on the stock, dealers said.
"The US has been the big issue and the ongoing litigation is the main drawback for most people," said one trader.
Several companies recently under the mergers and acquisitions microscope slipped, including ITV and Alliance & Leicester which both fell 1.9 percent.
Among gainers, property company British Land topped the FTSE leaderboard, up 4.7 percent, after two investment banks raised their ratings on the stock to "buy" in anticipation of gains the firm could make from new tax-efficient real estate investment trusts.
BAA added 2.2 percent after rejecting a take-over approach from a consortium led by Goldman Sachs. The airports operator is also fending off a hostile take-over bid from Spanish construction firm Grupo Ferrovial.
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